NICHII GAKKAN COMPANY 【9792】
Financial Results Briefing Document
for the year ended March 2005

May 27, 2005

http://www.nichiigakkan.co.jp
0Table of Contents
1. Income Statement for Account Settlement ……………………………………..…….. 2□Income statement (Consolidated)………………………………………………………… 3□Income statement (Non-consolidated) ………… ………… ………… ………………… 4□Segmental results (Consolidated)…. ……………………………………………………. 5□Segmental results (Non-consolidated) ……………………………………….…….…… 6
2. Financial Highlights……………………………….………………..….……….……. 7■Financial highlights (1) …………………………………………….……………..……….. 8■Financial highlights (2) ……………………….………….…………………………..…… 9
3. Corporate Innovation and Business Strategy ………………………………………. 10■Promotion program for fundamental structural reform (1)……………………… …… 11■Promotion program for fundamental structural reform (2) ………… …… …… …… 12
4. Medical Support Business ……………………… ………… …………………...…… 13□Medical Support Business (Non-consolidated)- Sales breakdown and the number of medical institutions contracted - …………….. 14■Renewal of employment system …… …… …… …… …… ……..……...………... 15■Measures for sales increase …… …… …… …… …… …… …… …… …… ……. 16■Development of stable profit structure …… …… …… …… …… …… …… …...… 17
5. Health Care Business …… …… …… …… …… …… …… …… …… ……..……. 18□Health Care Business (Non-consolidated) …… …… …… …… …… ……………… 19- Sales breakdown and the number of service use –■To increase the users of home-visit nursing care service …… …………………….. 20■Report on the multi-functional care center project (1) ……………………………...… 21■Report on the multi-functional care center project (2) ……………………………..… 22
6. Education Business……………………………………..…………………………. 23□Education Business (non-consolidated) - Sales breakdown - ……...……………… 24■Measures for earnings recovery ………………………………………………………... 25■New course offered - Preventive care project instructor training course - ………… 26
7. Reference Data…… …… …… …… …… …… …… …… …… …… …..… …… 27○Changes in income statement results and forecast for the current period ………… 28●Capital investment and allowance for depreciation [Non-consolidated] …………… 29●Approach to preventive care …… …… …… …… …… …… …… …… …… …… 30●Childcare business …… …… …… …… …… …… …… …… …… …… …… … 31
●Dividend policy …… …… …… …… …… …… …… …… …… …… …… ……….. 32

All the profit targets and other future data including the number of contracts, number of users and goals contained in this document are forecasts based on the information that Nichii Group has a graspof at present. Such information is subject to influence of uncertain factors such as economic circumstances, relaxation of regulations and employment conditions. Please understand, therefore, that
actual outcome of business performance and other achievements such as the number of contracts and number of users may be substantially different from the forecast.

1

Nichii Gakkan Company

1. Income Statement
for Account Settlement2Income Statement (Consolidated)
Consolidated(Millions of Yen)FY Mar. 2004
Half-year
AmountNet Sales
Operating Income%
Ordinary Income%
Net Income%

ChangeFull-year
AmountFY Mar. 2006 (Forecast)FY Mar. 2005

ChangeFull-year(Forecast)Half-year
AmountChangeAmountFull-year (Result)AmountChangeFull-year

Half-year
AmountChangeAmountChange94,085 13.8% 189,987 10.9% 99,927 6.2% 203,000 201,590 6.1% 106,900 7.0% 223,700 11.0%
6,645 19.7% 13,869 7.4%
7.1%

7.3%

6,748 23.1% 14,045 9.0%

2,057

▲69.0%

2.1%

2,165

7.2%

7.4%

2.2%

3,670 25.3%

7,762 11.1%

347

3.9%

4.1%

0.3%

▲67.9%▲90.5%

3

5,730

5,284

2.8%

2.6%

5,960

5,472

2.9%

2.7%

2,620

2,029

1.3%

1.0%

▲ 61.9%3,600 75.0% 11,080
3.4%▲ 61.0%5.0%

3,680 70.0% 11,230
3.4%▲ 73.9%

1,900
1.8%

109.7%

105.2%

5.0%
447.6%

6,230

207.0%

2.8%

Nichii Gakkan Company

Income Statement (Non-consolidated)
Non-consolidated(Millions of Yen)FY Mar. 2004
Half-year
AmountNet Sales
Operating Income%
Ordinary Income%
Net Income%

FY Mar. 2005

Full-year
ChangeAmountFull-year(Forecast)Half-year
ChangeAmountChangeAmountFY Mar. 2006 (Forecast)
Full-year (Result)AmountChangeHalf-year
AmountFull-year
ChangeAmountChange89,532 13.4% 180,608 11.0% 95,189 6.3% 192,100 190,638 5.6% 101,000 6.1% 211,500 10.9%
6,551 17.8% 13,510 5.9%
7.3%

7.5%

6,681 21.1% 13,764 7.4%

3,045

▲53.5%

3.2%

3,174

7.5%

7.6%

3.3%

3,726 21.9%

7,728 8.8%

1,589

4.2%

4.3%

1.7%

▲52.5%▲57.4%

4

6,840

6,188

3.6%

3.2%

7,110

6,438

3.7%

3.4%

3,780

3,407

2.0%

1.8%

▲ 54.2%3,570 17.2% 10,670 72.4%
3.5%▲ 53.2%▲ 55.9%5.0%

3,670 15.6% 10,870 68.8%
3.6%

5.1%

2,040 28.4%

6,190 81.7%

2.0%

2.9%

Nichii Gakkan Company

Segmental Results (Consolidated)
Consolidated
FY Mar. 2004
Half-year

FY Mar. 2005

Full-year

Full-year(Forecast)Half-year

FY Mar. 2006 (Forecast)
Full-year (Result)Half-year

Full-year

AmountChangeAmountChangeAmountChangeMedical Support
Business

47,855

8.5%

96,982

7.3%

52,041

8.7%

Health Care Business

34,772 18.2%

71,004 17.3% 37,524

7.9%

76,37075,889

Education Business

9,339 15.5%

17,4438,424 ▲9.8%

16,50015,448 ▲ 11.4%

7,500 ▲11.0% 15,500

Others4,987 17.3%

9,531 13.7% 16,411 229.1%

34,23035,211 269.4%

9,100 ▲44.5% 18,400 ▲47.7%

Eliminations

Net Sales
Medical Support
Business%
Health Care Business%
Education Business%Amount105,000 104,678

ChangeAmount

7.9% 54,800▲ 29,100 ▲ 29,637－▲ 6,200

94,085 13.8% 189,987 10.9% 99,927

6.2%

203,000 201,590

6.1%

106,900－

4,059 ▲14.5%
8.5%

7.8%

1.4%

▲ 2,350

9.4%

5.1%

4,572 42.7%
3,093 ▲21.2%
17.7%

－

307 139.8%
3.2%▲ 4,750－

6,644 19.7%

13,869

7.4%

7.3%

9,000
8.6%

1,233 ▲54.8%

2,500

AmountChange5.3%

112,500

7.5%

8,876 ▲ 16.6%－ ▲ 12,400
7.0%

2,213 ▲ 51.6%

0.3%

－

223,700 11.0%

5,270 61.9% 12,260 38.1%
9.6%

8.5%

89,700 18.2%

10.9%

1,220 ▲1.1%

3,840 73.5%

3.3%

3.3%

2.9%

2.9%

4.3%

493 ▲76.9%

550

83 ▲ 97.3%

90 ▲81.7%

830 900.0%

5.9%

3.3%

0.5%

1.2%

5.4%

▲320

▲355

▲0.9%

▲ 1.0%

▲110

－

▲0.7%

－

7.1%

3,256 ▲19.8%
6.3%

6.4%

22.9%

%

10,646－11.0%

2,728 81.4%
2,136▲ 4,973

Change6.9% 41,700 11.1%－

71

Operating Income

5.5%

Amount▲ 14,475▲ 2,868

OthersEliminations%(Millions of Yen)

▲ 2,816－

2,057 ▲69.0%
2.1%▲ 6,000 ▲ 5,532
5,730
2.8%

5

－

－

－

▲ 2,880

30

－

0.2%

▲1.1%

5,284 ▲ 61.9%
2.6%

▲100

－

▲ 5,880－

3,600 75.0% 11,080 109.7%
3.4%

5.0%

Nichii Gakkan Company

Segmental Results (Non-consolidated)(Non-consolidated)(Millions of Yen)FY Mar. 2004
Half-year
AmountMedical Support Business
Health Care Business
Education Business
Net Sales
Medical Support Business%
Health Care Business%
Education Business%
Cost of Sales%
Medical Support Business%
Health Care Business%
Education Business%
Gross Profit%
Medical Support Business%
Health Care Business%
Education Business%Selling, General and Adm inis trative
Expens es%

Change47,70932,483 21.0%
9,339 15.5%
89,531 13.4%
40,359 13.2%
8.4%

84.6%

%
Health Care Business%
Education Business%
Operating Income%

Full-year
AmountChangeHalf-year
AmountChange78.4%

3,399 ▲1.0%
36.4%

Full-year(Forecast)AmountFY Mar. 2006 (Forecast)
Full-year(Result)
Amount8.7%

7.9%▲ 11.4%

82.4%

85.6%

84.2%

79.5%

6,716 2.0%
38.5%

81.1%

3,651 7.4%

81.9%

7,115

44.8%

46.1%

153,16777.1%

7,349 ▲11.8% 17,039 ▲0.8%
15.4%

17.6%

7,023 36.3% 13,604 24.2%
21.6%

20.5%

5,939 27.7% 10,726 7.9%
63.6%

61.5%

43.3%

81.9%

7,400

80.2%

79.9%

7,488 1.9%
14.4%
18.9%

4,772

▲19.6%

56.7%

20,311 12.0% 41,370 8.7% 18,842 ▲7.2%
22.7%

3,870 ▲20.4%
8.1%

4,973 22.9%
15.3%

4,916 34.1%
52.6%

22.9%

8,627 ▲6.8%
8.9%

9,948 19.5%
15.0%

9,284 19.9%
53.2%

19.8%

4,462 15.3%
8.6%

6,238 25.4%
17.9%

7.3%

2,050 85.4%
6.3%

1,022 4.0%
10.9%

15.4%

8,411 6.2%

60.5%

8.7%

3,656 38.9%
5.5%

1,442 ▲34.4%
8.3%

6,551 17.8% 13,510 5.9%
7.3%

7.5%

▲13.0%

5.8%

342▲83.3%

1.0%▲322 ▲131.5%
▲3.8%

3,045
3.2%

6

▲53.5%

44.0%

53.9%

41.9%

79.7%

79.1%

9,000 20.2%
16.5%
18.8%

19.7%

9,954

9.4%

9.5%

9,060

56.0%
20.3%

26.9%

7,250 16.2%

8,700 ▲ 6.3%

4,380 ▲14.0%

9.7%

16.5%

16.4%

6,740

6,388

6.4%

6.1%

60

167

0.1%

0.2%

40

▲367

0.2%

▲ 2.4%

6,840

6,188

3.6%

3.2%

58.4%

8,600 ▲1.1%
55.5%

16,930 7.2%

▲ 24.0%3,700 22.3%

16.8%

33,530 7.2%
15.9%

6.8%

8,950 40.1%
8.0%▲ 95.4%50 ▲85.4%▲ 125.4%▲180 44.1%

0.1%

1,320 690.4%
1.6%

▲2.4%

400

-

2.6%

3,570 17.2%
3.5%

14,180 12.3%
16.9%

12.3%

▲ 54.2%

10,750 8.0%
9.6%

18.6%

56.3%

31,710 31,282

44,200 18.0%
20.9%

5,300 18.8%

17.8%

9,000 8.0%
58.1%

15.4%

12,840 12,627

15,500 21.2%
18.5%

20,500 8.8%

20.1%

19,700 20.5%
17.6%

7,300 10.9%

38,550 37,471 ▲ 9.4%
9,810

6,500 ▲8.6%

80,500 5.4% 167,300 9.2%

4,200 ▲12.0%

54.9%

16.6%

3,026

55.2%

68,500 17.9%
81.5%▲ 22.3%18.1%

5,094 3.6%

13,759 9.5% 27,860 10.0% 15,796 14.8%
3,478 0.2%

18.1%

8,333

82.4%

81.2%

15.7%

Change54,600112,000 7.4%
11.5%
38,90084,000 18.5%
7,500 ▲11.0% 15,500 0.3%
101,000 6.1% 211,500 10.9%
45,600 2.8% 92,300 4.9%

3,300 ▲9.6%

10.0%

Amount5.3%

5.9%

12,900 12,794 ▲ 6.0%
18.1%

Change31,600 11.6%

80.3%

9,100

AmountFull-year

9.8%

16,550 16,343 ▲ 4.1%
15.8%

6,580 ▲6.3%

Half-year

83.5%

84.3%

58,200 58,080

69,219 13.9% 139,237 11.7% 76,346 10.3% 153,550
77.3%

Change96,682
51,867
104,500 104,314
66,482 18.4% 34,896 7.4%
71,100 70,875 6.6%
5.5%
17,4438,424 ▲9.8%
16,500 15,448
180,608 11.0% 95,189 6.3% 192,100 190,638 5.6%
79,643 9.2% 44,378 10.0%
87,950 87,971 10.5%
7.3%

25,460 17.4% 52,877 17.0% 28,316 11.2%

15.4%
Medical Support Business

FY Mar. 2005

10,670 72.4%
5.0%

Nichii Gakkan Company

2. Financial Highlights

7

Financial Highlights (1)1. Net sales have reached ¥200 billion
2. Began fundamental reform of theorganization for stable growth over along period
3. Started practical development of“Multi-functional Care Center Project”

8

Nichii Gakkan Company

Financial Highlights (2)Key points for each business segment
Medical Support Business-Continuous activities to improve medical practical operations have increased on-site cost
consciousness.
We began improving our contracts with medical institutions. Field managers took part in the contract
negotiations.
The PFI project for Yao City Hospital was started in May 2004.

Health Care Business-We are developing facilities for nursing care services and are building the framework for self-directedbusiness promotion.
We created a program to set up facilities for home-visit nursing care services (The number of facilities
increased by 217 to 889 as of the end of March 2005.)
We launched the “multi-functional care center project” in October 2004, and started “preventive careservice” and “overnight care service.”

Education Business-We have begun to discuss the impact on our courses from the changes in requirements for helper
qualifications.
Improvements have been made for greater diversity of marketing activities, including launching “Manabi
Net” , the web site specializing in medical and nursing care education curriculums.
We are reviewing ways to implement education courses, utilizing our education experience developed
over 30 years.

9

Nichii Gakkan Company

3. Corporate Innovation
andBusiness Strategy

10Promotion program for fundamental structural reform (1)- To continue our corporate growth Fiscal 2005

Fiscal 2006 andand onward
onwardCorporate innovation andestablishment of competitive leadership

Upgrading the corporate valueof the Nichii Group companies

Establishing business base of
Nichii Group companies

Reconstructing the management baseof the headquarters- Revitalization of the organization by
renewing the management system- Realizing autonomy for all Nichii Group
companies- Supporting branch offices for betterbusiness performance, taking advantageof the headquarter functions- Establishing a business base to maximize
corporate value- Promotion of strategic businessdevelopment toward market expansion- To become a corporation with a strong
presence as an industry leader

11

Nichii Gakkan Company

Promotion program for fundamental structural reform (2)- To continue our corporate growth Fiscal 2004

Fiscal 2003 (30(30 anniversary)anniversary)thth

Building a new framework in the field

Fiscal 2005
Establishing the organization
under the new framework

Health Care Business

Jun. 2003 - Mar. 2005
Launched “Operational Improvement Project” and completed the 1st phase
Medical Support BusinessAug. 2003 - Mar. 2005
Launched “Operational Improvement Project” and completed the 1st phase

Education Business

Apr. 2005 and onward
The 2nd phase progresses
Apr. 2005 and onward
The 2nd phase progresses

Jun. 2004 and onward

Launched “Operational Improvement Project” which is now in progress

Goal of theoperational improvement plan
(1) Promote autonomy of employees(2) Re-enforce the field-first policy(3) Further enhance the sales force(4) Introduce performance-achievement
linking system on a facility basis

Reform the framework ofbranch shop/branch office/headquarters
Apr. 2004: Implementation oforganizational reform
Headquarters: Abolish divisional headquarters system
and restructure the organization to manage sales andprofit in a cross-sectional manner.
Branch offices: Change the segment from 5 divisions to
11 branch offices and strengthen control in each area.
Branch shops: Active recruitment of new managers

12

Reform the sales system
Apr. 2005: Expansion and improvement ofsales division, and holding marketingstrategy meetings on a regular basis
Hold marketing strategy meetings with branch shops,
branch offices and the head office in order to share thesame goals and to work together to accomplish thebusiness plan.

Nichii Gakkan Company

4. Medical Support Business

13

Medical Support Business (Non-consolidated)- Sales breakdown andnumber of contracted medical institutionsinstitutions-

Sales Breakdown(Millions of Yen)FY Mar. 2005

FY Mar. 2004
Half-year

Full-year

Half-year

Full-year(Forecast)FY Mar. 2006 (Forecast)
Full-year(Result)

Half-year

Full-year

Hospitals

38,77278,55543,09787,00086,23645,30092,500

Clinics andPharmacies etc.

8,936

18,1268,770

17,50018,0789,300

19,50047,70996,682

51,867

104,500

104,31454,600112,000

TOTAL

Number of contracted medical institutions
FY Mar. 2005

FY Mar. 2004
End of Sep.

(Number of facilities)

End of Mar.

End of Sep.

End of Mar.
(Forecast)FY Mar. 2006 (Forecast)End of Mar.
(Result)

End of Sep.

End of Mar.

Hospitals

2,375

2,502

2,437

2,600

2,477

2,520

2,550

Clinics andPharmacies etc.

10,998

11,29011,002

11,30011,178

11,20011,35013,373

13,792

13,43913,90013,655

13,72013,900TOTAL

14Nichii Gakkan Company

Renewal of Employment System
1st phase
Apr. 2004 – Mar. 2005
Dividing medical staff
into two categories-Nichii Gakkan Staff(Core staff)-NPB dispatched staff(External staff)

Development of clear career plan
Traineeswhocompleteour education
courseNPB

Selection

Traineeswhocompleteour education
courseIntroduction of employment patternselection system for external staff- Nichii Gakkan Staff- NPB dispatched staff

Nichii Gakkan

NPB

External channel

Fundamental reformof
employment system

2nd phase
Apr. 2005 and onward* NPB stands for Nichii Power Bank.

Effects of employment system renewal on the selection system- Thorough cost control and drastic cost reductions- Improved profitability of both companies (Nichii Gakkan
and NPB) and enhanced independence of NPB- Advancement in finding and utilizing personnel across the group15

Nichii Gakkan Company

Measures to Increase Sales
Efforts to increase sales in fiscal 2005
New users
Drastic increase in the sales staff
of branch offices and branch shops

Hospitals
Hospitals

Aggressive development of
medical practice consulting service

Promoting training of experts withmedical office skills for clinics

Clinics
Clinics

Existing users
Continuous negotiation for
payment forservices currently not paid for

We will offer medical system reform seminars to gaina foothold with aggressive sales activities.
We will promote training of experts with medical officeskills, and intensify sales to clinics in order tocultivate new market.

Hospitals
Hospitals

On-site administrative staff will make efforts toimprove contract details, including payment forservices currently not paid for, and to solicit
expansion of services more intensely.

Hospitals
Hospitals

We will strive to increase the stability of the work force
and to improve skill levels for greater satisfaction ofclients, and promote sharing human resources on abranch office basis.

Intensification of sales
to expand contractual coverage
Forming a solid foundationof human resources

The sales staff will perform sales activities effectively,
targeting important clients based on our businessresults.

&& Clinics
Clinics

16

Nichii Gakkan Company

Development of Stable Profit Structure
Efforts to ensure fair profits in fiscal 2005
1. Reviewing contracts with particularemphasis on the rate of profitability

2. Thorough on-site cost control

Introduction of services
with high added value

Reduction of working hours
by improving skill levels
Reinforcement of fieldmanagement abilities

Realizing payment
for services currently not paid for

Enforcement offair shift control

Enforcement of contract amendment andthorough cost control

Improvement of contracts and profits

17

Nichii Gakkan Company

5. Health Care Business18

Health Care Business (Non-consolidated)- Sales breakdown andthe number of services used -Sales Breakdown(Millions of Yen)FY Mar. 2004
Half-year
Home-visit nursing care service
Day care service
Rental/selling of welfare equipment,
housing improvement service
Other services

Net Sales

Full-year

FY Mar. 2005
Half-year

Full-year(Forecast)

19,2796,146
4,924

38,83012,371
10,443

20,356
6,592
5,339

41,20013,20010,8002,133
32,483

4,838
66,482

2,608
34,896

5,900
71,100FY Mar. 2006 (Forecast)
Full-year(Result)

Half-year

40,724
13,026
11,096
6,027
70,875

21,200
7,200
6,200
4,300
38,900Full-year

44,30015,70013,20010,80084,000* Home-visit nursing care service includes home-visit bathing service and care planning. Other services include catering service, etc.

Number of services used (Number of contracts)
FY Mar. 2004

FY Mar. 2005

(Number of facilities)
FY Mar. 2006 (Forecast)End of Sep.

End of Mar.

End of Sep.

End of Mar.
(Forecast)End of Mar.
(Result)

End of Sep.

End of Mar.

Number of care planning users

37,40939,481

42,12345,80044,31549,40052,700Home-visit nursing care service

55,651
15,06324,62895,342

57,58615,14726,00098,73359,43015,34628,315103,091

61,800 60,699
15,600 15,159
29,400 29,614
106,800 105,472

66,30017,30073,80019,90033,700127,400

Day care service
Rental of welfare equipment
TOTAL (Number of service users)

31,400115,000* Home-visit nursing care service includes home-visit bathing service.

19

Nichii Gakkan Company

To increase the users of home-visit nursing care
Reinforcementof infrastructure
Goal
Goal ofof fiscal
fiscal year
year 2004
2004

Completed establishment of
200 additional facilities forhome-visit nursing care.

Increase in new users(1) Establishment of evaluation method
at the facility level
Clarify the criteria used to evaluate
the increase in users(2) Enhancement of user introductions bystronger partnerships with medical institutions
Partnership with 13,600 contracted
medical institutions based on our
network across the country

The
The number
number ofof facilities
facilities forfor home-visit
home-visit nursing
nursing
care
as
of
the
end
of
March
2005
care as of the end of March 2005

889

Achieve the“PLUS 1” program* Facilities for home-visit bathing services are included.

(Increased by 217 in one year)

by raising the average monthly net increase pace per
facility by 1 user compared to the previous year.

20

Nichii Gakkan Company

Report on the Multi-functional Care Center Project (1)[Plan published at the “Multi-functional care center briefing session” held on Sep. 27, 2004]
Number of facilities
established
Expanded day-carefacilities
New day-care facilities
New day-care facilities+ group homes
Pay nursing homes

FY Mar. 2005

FY Mar. 2006

FY Mar. 2007

TOTAL

100
10
0
0

0
82
8
6

0
0
0
54

100
92
8
60

The plan was revised to improve the infrastructure, considering the direction of long-term care insurance
system amendments and trends of local governments.

New establishment plan [as of May 27, 2005]
Number of facilities
established
Expanded day-carefacilities
New day-care facilities
New day-care facilities+ group homes* Pay nursing homes

FY Mar. 2005 (result)

FY Mar. 2006 (forecast)FY Mar. 2007 (forecast)

TOTAL

2
11
0
0

98
50
1
1

0
0
1
1

100
61
2
2

* As to the change in the plan for pay nursing homes, we are now looking into the development of new types of habitation services,because the government is reviewing the qualifications for care of those placed in specified facilities. The project is proceeding in amanner that minimizes investment risks.

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Nichii Gakkan Company

Report on the Multi-functional Care Center Project (2)Changes
Changes inin salessales andand grossgross profits
profits [FY[FY Mar.
Mar. 2005
2005 –– FY
FY Mar.
Mar. 2008]
2008][Plan published on Sep. 27, 2004](Millions of Yen)
25,00020,000

25bn.

Sales
Gross profits

15bn.

Sales
Gross profits

12,00015,00012bn.
8.5bn.

9,000

10,0005,000

New plan [as of May 27, 2005](Millions of Yen)
15,0005.5bn.
0.1bn.-0.4bn.

0-5,000Mar. ’05-1.2bn.

Mar.’06

1bn.

Mar.’07

6,000

5bn.

3,000
0

Mar.’082bn.
0.07bn.
-0.07bn. -0.5bn.
Mar. ’05

Mar.’06

1.5bn.
Mar.’07

3.5bn.

Mar.’08-3,000CapitalCapital investment
investment plan
plan

New plan [as of May 27, 2005][Plan published on Sep. 27, 2004]

FY Mar. 2005

FY Mar. 2006

FY Mar. 2007

FY Mar. 2008

Capitalinvestment

9,038

9,716

1,726

－

Allowance
fordepreciation

48

614

576

576

Project Revised

Account(Millions of Yen)FY Mar. 2005

FY Mar. 2006

FY Mar. 2007

FY Mar. 2008

(Result)(Forecast)(Forecast)(Forecast)investment

3,000

9,100

150

－

Allowance fordepreciation

20

320

420

420

Account
Capital* We will cut capital investment by about 8 billion yen compared with
with the original plan, and spend the capital intensively on
the highly functional “DayDay-care centers”
centers”. The ROI (return on investment) for the year ending March 2008 and onward is
expected to exceed 14%.

22

Nichii Gakkan Company

6. Education Business

23

Education Business (non-consolidated) - Sales breakdown Sales Breakdown(Millions of Yen)FY Mar. 2004
Half-year

Medical office work

FY Mar. 2005

Full-year

Half-year

Full-year(Forecast)FY Mar. 2006 (Forecast)
Full-year(Result)

Half-year

Full-year

3,268

6,242

3,193

6,300

6,081

3,000

6,170

Home helper training
course

5,795

10,636

4,856

9,300

8,689

4,180

8,700

Babysitter training
course and others

275

564

374

900

678

320

630

9,339

17,4438,424

16,50015,4487,500

15,500courseTOTAL

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Nichii Gakkan Company

Measures for Earnings Recovery

Sales
1. Increase sales by raising awareness of education business development at branch shops
2. Enhance promotion of course enrollment by differentiated marketing
3. Promote searches for new students

Increase sales by enforcement of the basic strategy of advertising

Profits
1. Conduct efficient marketing activities
2. Enforce management of income and expenditure by classroom
3. Control course offerings as instructed by the head office

Profit recovery through thorough cost control

25

Nichii Gakkan Company

New course offered – Preventive Care Project Instructor Training Course –The long-term care insurance system is to be amended in 2006, andpreventive care will be institutionalized.

Preventive care project instructor training course- Time:May 28, 2005

The course opened at 100 classrooms across the country.

- Learning style:Day school (curriculum of 30 hours consisting of 14 subjects including lectures and exercises)- Target:Care managers, nurses, care workers, physical therapists, occupational therapists, persons with acertification of home helper level 1, persons with a certification of home helper level 2 and over 2
years of work experience

Supply of human resources
to the preventive care business at our nursing facilities

Meet the human resource needs resulting from the introduction of preventive care services.

26

Nichii Gakkan Company

7. Reference Data

27

Changes in Income Statement Results and Forecast for the Current Period
Changes in consolidated business results(Net sales and ordinary income)(0.1 Billions of Yen)
2,500

2,000

(Millions of Yen)
20,000Net sales
Ordinary income

15,0001,500
10,000
1,000
5,000
500
0
0
'97/3

'98/3

'99/3

'00/3

'01/3

'02/3

'03/3

'04/3

'05/3

'06/3
-5,000-500-10,000-1,000(Millions of Yen)FY Mar. 1997

FY Mar. 1998

FY Mar. 1999

FY Mar. 2000

FY Mar. 2001

FY Mar. 2002

FY Mar. 2003

FY Mar. 2004

FY Mar. 2005

Net Sales

52,65359,47570,37992,178114,226

142,386

171,293

189,987

201,590

223,700

Operating
Income

3,975

4,376

4,880

5,143

▲5,135

3,339

12,912

13,8695,284

11,080

3,991

4,552

5,119

5,343

▲5,074

3,342

12,891

14,045

5,472

11,230

1,794

2,374

2,548

4,186

▲3,999

1,092

6,988

7,762

2,029

6,230

Ordinary
IncomeNet Income

28

FY Mar. 2006 (Forecast)Nichii Gakkan Company

Capital Investment and Allowance for Depreciation [Non-consolidated]

Changes in capital investment and allowance for depreciation(Millions of Yen)FY Mar. 2005

FY Mar. 2006 (Forecast)

Full year

Full year

Capital Investment
*1)

3,974

9,100

Allowance forDepreciation *2)

1,251

1,700

*1) Capital Investment includes tangible fixed assets only.
*2) Allowance for depreciation includes tangible andintangible fixed assets, as well as investments.

29

Nichii Gakkan Company

Approach to Preventive CareTo respond to amendment to the long-term care insurance systemquickly and flexibly,
We are entering the “Preventive Care Business”.
<Approach in fiscal 2005><Approach in the next andsubsequent fiscal years>

Preventive care project
instructor training course

We opened the course across the country from the end of May
2005. The course intends to train specialists to undertakepreventive care service.

- Qualified personnel
dispatching businessPreventive care service

To introduce strength training, we established 23 day-care
centers capable of the training (as of May 2005), and plan tofurther increase the number to about 160 by the end of fiscal
2005.

- Home-visit
preventive
nursing care

Sale of strength
training equipment

We are selling strength training equipment made in Finland, andusing it in our day-care service and training course.
We will also promote our total package (human resources +equipment) to other establishments- Preventive daycare

As a pioneer in the preventive care business, we offer
human resources development, business entrustment from local governments, and merchandising.

30

Nichii Gakkan Company

Childcare Business1. Childcare centers under direct management• A new brand of Nichii Gakkan childcare service,

has been launched!

- Iris Kids Kashiwa Childcare Center (Kashiwa city, Chiba)

Iris Kids- Iris Kids Takanawa Childcare Center (Minato ward, Tokyo)- Our unique approach -2. Other childcare centers

Provision of eurythmics and English education• Government-financed and privately operated
childcare centers: 1

Interaction between the elderly and children
Enriched feeding program- Kamiichi-machi Yumisho Public Childcare Center(Kamiichi-machi, Nakaniikawa-gun, Toyama)• Childcare centers in hospitals: 10* Eurythmics: Education program by special instructors whichteaches appreciation of music and personality improvement

Future Strategy
1.
2.
3.

Aggressive development of childcare centers under direct management, focusing on the local
communities which can receive public financial assistance.
Promotion of childcare in hospitals, utilizing the experience accumulated from our medical support
business.
Gaining contracts for on-site day care services in accordance with the laws concerning thepromotion of measures for childcare support.

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Nichii Gakkan Company

Dividend Policy
Recent dividend situation(Millions of Yen)
Dividend payout ratio: 23.2% 25(%)
25
Dividend

Dividend payout ratio

20

15

22 Yen17.5Yen
17.5Yen17.5 Yen

20

15

10

10

5

5

0

0

FY Mar. 2003

FY Mar. 2004

FY Mar. 2005

* Calculated on nonconsolidated basis

We expect to pay an increased dividend for the year ended March 2005 and promote enhancement of profit
return to shareholders. Return to shareholders will continue to be a priority for us , and further efforts will bemade to heighten the corporate value.

32

Nichii Gakkan Company